Gujarat has left behind the state of Maharashtra to become the largest manufacturing hub in the country, as per data from RBI. Gujarat’s GVA (Gross Value Addition) in the
manufacturing sector grew 15.9 percent yearly on average between Financial Year 2012 and Financial Year 2020 to reach Rs. 5.11 lakh crore, as per the RBI data.
The annual growth rate of the state of Maharashtra during the period was 7.5 percent/annum. This took Maharashtra’s total manufacturing Gross Value Addition to Rs. 4.34 lakh crore in Financial Year 2020 and therefore, continues to be India’s biggest services hub.
However, some of the worst performers among states that were among the top ten manufacturing states over the period included states such as Andhra, Telangana, and Rajasthan with average annual growth rates of 6.9 percent, 5.5 percent, & 3.8 percent respectively.
Gross Value Addition is actually Gross Domestic Product minus net product taxes. This displays or shows growth in the supply of goods & services. The other states with the highest manufacturing Gross Value Addition included Karnataka at Rs 2.1 lakh crore, Tamil Nadu at 3.43 lakh crore, & Uttar Pradesh at Rs 1.87 lakh crore. The country’s manufacturing Gross Value Addition increased to Rs 16.9 lakh crore in Financial Year 2020 at an average growth rate of 9.7 percent since Financial Year 2012.
However, the state of Maharashtra retained its position as the leading provider of services in India, with Maharashtra’s services Gross Value Addition increasing by 12.6 percent/annum reaching Rs. 15.1 lakh crore in Financial Year 2020.
Higher investment – a key player
What played a significant role in allowing Gujarat to outpace the other states of India in manufacturing growth during the period likely was the Higher investment in the state.
The state of Gujarat witnessed the highest level of capital investment in terms of gross fixed capital formation which is a measure of investments between Financial Year 2012 and Financial Year 2019, which was at a total of Rs 5.85 lakh crore. This was ahead of the state of Maharashtra that saw an investment of Rs 4.07 lakh crore over the
period, while Andhra witnessed a cumulative GFCF of Rs 1.49 lakh crore.
One of the most attractive destinations for FDI
According to a report by KPMG, what contributed to boosting ease of doing business in the state of Gujarat and making it one of the most attractive destinations for Foreign Direct Investment were the key reforms by Gujarat. This includes the smoother administration of incentive schemes, the introduction of a single-window for business clearness & the easing of labor norms.
Petroleum capital
Gujarat possessed a total installed power generation capacity of 38255.07 Mega Watts, as of April 2021. The major reason why the state of Gujarat is considered the petroleum capital of the country is owing to the presence of large refining capacity which is set up by private & public sector enterprises.
World’s largest producer of processed diamonds
Furthermore, the state of Gujarat is the largest producer of processed diamonds in the world. It accounts for eighty percent of the country’s diamond exports and seventy-two percent of the world’s processed diamond share.
Gujarat is not only the largest denim manufacturer in India but also the third largest manufacturer of denim, internationally. The state contributes sixty-five to seventy percent to the country’s denim manufacturing.
42 ports & 65 notified SEZs
The state comprises forty-two ports, 18 domestic airports & one international airport. It also has a hundred and six product clusters and sixty notified special economic zones. As part of the USD 90 billion Delhi-Mumbai industrial corridors, large-scale investment is anticipated in the state of Gujarat.
The state of Gujarat received the highest Foreign Direct Investment at USD 21.89 billion in Financial Year 2021, as per the Department for Promotion of Industry and Internal Trade, and stood at the top of all states with thirty percent of the total equity inflows.
Total exports from the state of Gujarat were accounted for USD 63440 million in 2019-2020 and it was USD 60587 million in 2020-2021.
Key sectors of the state are as follows:
Gujarat has over three thousand and three hundred pharmaceutical manufacturing plants that contributed thirty to thirty-five percent to the country’s pharma industry’s turnover and around twenty-eight percent to the country’s pharma export during 2018-2019.
Seventy-nine APMCs (agricultural produce market committees) were linked with the National were linked with the eNAM (National Agriculture Market) as of March 2019.
According to the Indian Ports Association data which was published in the month of June last year, the number of ports stood at forty-six, and between the months of April and November, last year, 73.86 million tonnes of cargo traffic were handled by Deendayal port.
Known as the country’s petrochemical & chemical hub, Gujarat possesses 8 clusters, fourteen industrial estates & 3 Special Economic Zones. These are mainly dedicated to the chemicals & petrochemicals industry.
